With Lykos’ regulatory failure now squarely in the rearview mirror, Compass Pathways and Definium are leading what one analyst suspects will be “a very big year for psychedelics.”
After a false start in 2024 with the rejection of Lykos Therapeutics’ MDMA-based therapy for post-traumatic stress disorder, peers Compass Pathways and Definium are nearing the regulatory finish line and preparing to move the psychedelics field from scientific thesis to commercial reality.
“This is a very big year for psychedelics,” H.C. Wainwright analyst Patrick Trucchio told BioSpace. “It’s the biggest year from a clinical data standpoint,” since the firm began covering Compass in 2018.
“With multiple late-stage data readouts and regulatory catalysts in 2026, we believe our coverage is well positioned to transition from ‘speculative’ clinical validation to large-scale market launch,” Trucchio and colleagues wrote in a Jan. 28 note.
Three upcoming Phase III data drops from Definium—formerly MindMed—for its LSD-based MM120 in generalized anxiety disorder (GAD) and major depressive disorder (MDD) could be a “potential psychedelic space tipping point,” added RBC Capital Markets, which outlined the company’s upcoming catalysts in a Jan. 12 note to investors.
Meanwhile, Compass is planning multiple readouts this quarter for a psilocybin-based therapy for treatment-resistant depression (TRD), COMP360. In addition to 26-week results from the Phase III COMP005 trial, Compass will release full data from Part A of COMP005 and full data from Part B of the parallel Phase III COMP006 trial, Steve Levine, the company’s chief patient officer, told BioSpace.
A recent investor and key opinion leader (KOL) event held by Compass reframed the opportunity “from a theoretical commercial debate to an executable launch scenario,” H.C. Wainwright said in a Jan. 8 note. “Overall sentiment from providers was notably enthusiastic and proactive,” the analysts continued, with multiple KOLs characterizing COMP360 as “a rare, field-defining innovation.”
Trucchio said Compass is “very likely” to file for approval of COMP360 by the third quarter of this year, followed by Definium’s LSD-based anxiety candidate MM120. “So by 2027, that’s a reality that MM120 and COMP360 are probably going to be approved,” he predicted.
Further greasing the wheels for psychedelics could be Health Secretary Robert F. Kennedy Jr., who has previously accused the FDA of “suppressing” such treatments, Pharmaphorum reported in January 2025. FDA Commissioner Marty Makary has also expressed support for psychedelic therapies. In an interview last May with NewsNation, Makary said the FDA would “take an expeditious and rapid review” of clinical data for psychedelic therapies in trials.
Trucchio pointed to the “willingness of this administration to upend the norms that we’re used to” as a potential positive for the psychedelics sector—but also noted that it could be a double-edged sword.
“It wouldn’t surprise me if there’s a pretty significant change for the next neuropsych adcom that reviews MM120 or COM360 . . . maybe building it with people who have a little bit more experience with psychedelics,” Trucchio said. This could be helpful for the companies, he continued, “but in some ways, it could actually be more demanding.”
What’s Left To Prove
The psychedelics sector is, in many ways, still regrouping from the FDA’s August 2024 rejection of an MDMA-assisted therapy for post-traumatic stress disorder (PTSD) from Lykos—now Resilient Therapeutics. The rebuff was a blow but details from the complete response letter (CRL) published in September 2025 made clear that the rejection was primarily focused on Resilient’s trial design rather than the psychedelics field overall.
Compass and Definium, along with AtaiBeckley and other psychedelic players in the depression space, are now gearing up to claim the title that Lykos once sought—the first FDA-approved “classic psychedelic.”
Johnson & Johnson’s Spravato, an inhaled esketamine treatment, was first approved by the FDA for TRD in 2019 and secured a supplemental approval last year as the first monotherapy for this condition. J&J has previously told BioSpace it does not consider Spravato to be a classic psychedelic. The difference lies in both the mechanism and the psychedelic experience, Trucchio said. While classic psychedelics activate the 5-HT2A receptors, esketamine hits the NMDA receptor. As a result, the dissociative effect is less profound.
Nevertheless, Spravato has primed the infrastructure for future psychedelics-based therapies and is often the comparator for those in development. During its investor event, for example, Compass reiterated that from a payer perspective, COMP360’s single-session 6-week efficacy alone already represents a differentiated value proposition compared to Spravato’s approximately 10 administrations over the same timeframe, “with any durability beyond 6 weeks viewed as incremental upside rather than a prerequisite for reimbursement,” Wainwright wrote.
What the FDA is most interested in seeing from the 26-week COMP005 readout, according to Compass’ Levine, is the safety of potentially retreating patients up to 12 weeks.
Investors will also be watching closely. When Compass announced 6-week data from the Phase III COMP005 trial in June 2025, the reaction from Wall Street was muted. While the trial hit its primary endpoint, the 3.6-point reduction on a key depression scale paled in comparison to Phase II data that showed a 12-point drop over the same time period.
“Typically, in Phase II to Phase III in neuropsychiatry, you come down on the primary endpoint,” as later-stage trials comprise a broader sample with a higher number of enrolled patients, Trucchio explained. Data from a placebo arm were not shared, leaving investors and analysts clamoring for more information.
The subdued response to the data may also be due to the fact that some early academic trials showed remission rates of over 85% in TRD, Trucchio added. “The expectations are elevated because these are psychedelics, and because . . . those early academic studies showed this profound remission rate. Unfortunately, because that high bar was created, I think there’s this idea that these are miracle drugs, they’re going to cure everyone of their depression. That’s not what this is.”
Ready To Launch?
Trucchio cautioned that psychedelics may experience delays during launch because the Drug Enforcement Administration (DEA) will have to reschedule psilocybin and LSD, which are both currently classified as Schedule 1 drugs, meaning they have “no currently accepted medical use and a high potential for abuse.”
Following an FDA approval—which Levine said would automatically negate the first part of the above definition—the DEA would then have 90 days to make a determination of rescheduling. Then, each of the 50 U.S. states will need to follow suit, though Levine noted that “about half of them” have trigger laws, meaning that they “essentially automatically follow federal guidance.”
Given all this, Trucchio said that even if Compass were to submit an NDA following the 26-week data this quarter, a fourth-quarter 2027 launch would be “optimistic.”
Once launched, it won’t necessarily be smooth sailing for the new drug class, as Trucchio laid out potential barriers including regulatory uncertainty around Risk Evaluation and Mitigation Strategies (REMS), scalability and delivery.
“The REMS are going to be unique for each drug,” he said. “This is not going to be like opioids, where there’s a shared REMS. Each drug is going to have its own REMS and requirements. They’re probably all going to be based on Spravato . . . but still, that’s going to represent another hurdle.”
In terms of scalability, the different treatment durations of the drugs could raise reimbursement issues, Trucchio said. Clinics currently administering Spravato typically treat three to five patients in a day, seeing each for two hours. COMP360 can take six hours to administer; MM120 can take eight.
While the current spotlight for Compass—and investors—is on TRD, Levine highlighted another Compass announcement that largely flew under the radar this month: the FDA’s acceptance of an Investigational New Drug (IND) application for a late-stage trial of COMP360 in post-traumatic stress disorder (PTSD).
“I think it can’t be overemphasized how important that is. That’s 13 million patients. There hasn’t been an approval there this millennium,” he said. “We are so excited about the potential for both TRD and PTSD now to potentially have new options for patients. This really can change and hopefully save the lives of lots of people.”
